Correlation Between Bank of America and Victory Tax-exempt
Can any of the company-specific risk be diversified away by investing in both Bank of America and Victory Tax-exempt at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank of America and Victory Tax-exempt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Victory Tax Exempt Fund, you can compare the effects of market volatilities on Bank of America and Victory Tax-exempt and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank of America with a short position of Victory Tax-exempt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Victory Tax-exempt.
Diversification Opportunities for Bank of America and Victory Tax-exempt
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Victory is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Victory Tax Exempt Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Tax Exempt and Bank of America is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank of America are associated (or correlated) with Victory Tax-exempt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Tax Exempt has no effect on the direction of Bank of America i.e., Bank of America and Victory Tax-exempt go up and down completely randomly.
Pair Corralation between Bank of America and Victory Tax-exempt
Considering the 90-day investment horizon Bank of America is expected to generate 5.21 times more return on investment than Victory Tax-exempt. However, Bank of America is 5.21 times more volatile than Victory Tax Exempt Fund. It trades about 0.22 of its potential returns per unit of risk. Victory Tax Exempt Fund is currently generating about 0.16 per unit of risk. If you would invest 4,265 in Bank of America on August 25, 2024 and sell it today you would earn a total of 435.00 from holding Bank of America or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Victory Tax Exempt Fund
Performance |
| Timeline |
| Bank of America |
| Victory Tax Exempt |
Bank of America and Victory Tax-exempt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Victory Tax-exempt
The main advantage of trading using opposite Bank of America and Victory Tax-exempt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Victory Tax-exempt can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Victory Tax-exempt will offset losses from the drop in Victory Tax-exempt's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Victory Tax-exempt vs. Gmo Resources | Victory Tax-exempt vs. Clearbridge Energy Mlp | Victory Tax-exempt vs. Franklin Natural Resources | Victory Tax-exempt vs. Icon Natural Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |